Professional Documents
Culture Documents
Dpfer
Chairman of European Fashion and Textile Export Council
(EFTEC)
TABLE OF CONTENT
Development of the Russian Retail Market Value of textile Clothing & Accessories
(HS Codes Chapters 61 & 62) 2003-2012, 2013-2015 projection, in 1.000 Million
1.000 mn.
1.
50
46
42
40
38,2
Boom
Phase
35
32
37,4
33
30
27,4
29,1
Financial Crisis
20
CPM
Take Off 2003
4,0
3,0
0
2003
2005
Source/Copyright: EFTEC
2007
2009
2011
2013
2015
2.
mn.
Development of Exports of textile Apparel and Accessories from EU-27 and China to
Russia at ex-works prices in Million , 2008 till 2012, 2013/2014 p
5.000
4.000
4.000
3.645
3.815
3.314
3.630
3.057
3.105
3.300
3.000
2.570
3.017
2.778
2.734
2.198
EU-27
China
2.242
2.000
1.690
1.000
0
2007
2008
2009
2010
2011
2012
2013
2014
Source Eu-27: EuroStat/C.I.T.H. Source China: UnComTrade ECB average annual currency exchange rates against US $
2.1. Benchmark of the Development of Exports of textile Clothing & Accessories from
the three leading EU-Supplier Nations to Russia, Comparison Year 2013p to Peak Year 2008
mn.
3.500
3.300 (+ 9 %)
3.017(+ 10%)
3.105 (+ 12%)
3.000
2.242 (+ 2%)
2.500
2.734 (+ 22%)
2.199 (-29%)
2.000
EU-27
Italy
Germany
1.500
1.318(+ 10%)
France
1.312 (+ 9%)
901 (- 31%)
1.000
1.040 (+ 16%)
757 (+ 8%)
897 (- 1%)
536 (- 29%)
500
277 (+ 4 %)
1.144 (+ 10%)
189 (- 32 %)
571(+ 19%)
659 (+ 15 %)
725 (+ 10%)
481(- 11%)
173 (- 9 %)
198 (+ 9%)
210 (+ 6 %)
215(+ 2%)
0
2008
Source/Copyright: EFTEC
2009
2010
2011
2012
2013 p
million
2.2. Benchmark of the Development of Exports of textile Clothing & Accessories from
eight leading EU-Supplier Nations to Russia, Comparison Year 2012 to Peak Year 2009
1300
1200
1.144 (+27 %)
1100
1000
901
900
800
700
659 (+ 23%)
600
2009
2012
536
500
400
300
197 (+ 4 %)
189
200
182 (+ 119%)
83
100
178 (+ 50%)
119
124 (+ 80 %)
110 (+ 358 %)
69
24
0
Italy
Germany
Source/Copyright: EFTEC
France
Spain
Lithuania
U.K.
Latvia
106 (+ 112%)
50
Finland
3.1. Share of main Product Categories of Mens and Boys knitted and woven Outerwear against total
EU-27 Mens and Boys Outerwear Exports to Russia, Comparison Year 2012 against
Crisis Year 2009
502,6 Million
Polo Shirts
2,0%
Indoor
Jackets
6,3 %
Business
Other Men's
Wear 6,6%
740,1 Million (+ 49 %) *
Trousers
24%
Shirts
9,50%
Denim
Trousers
9,6%
Indoor Jackets
6%
Polo-Shirts
2,6%
Other Men's
Wear 9%
Trousers
(excl.Denim)
26,5%
Business
Shirts
10%
Sweaters/
Cardigans
10%
Sweaters &
Cardigans
11%
Suits 15%
Outdoor
Jackets &
Coats 16%
Denim Trousers
9,4%
2009
Suits
11,2%
Outdoor Jackets
& Coats
15,3%
2012
7
Source/ Copyright: EFTEC, * average annual growth over three years since 2009 = 16,3 %
3.2. Share of main Product Categories of Womens and Girls knitted and woven Outerwear against total
EU-27 Womens and Girls Outerwear Exports to Russia, Comparison Year 2012p against
Crisis Year 2009, in mn.
1.107 Million
Blouses
8,4%
Outdoor
Jackets/Coats
11,4%
Denim
Trousers
3,30%
Outdoor
Jackets/Coats
10,6%
Other
Women's
Wear
16,0 %
Blouses
8%
Denim Trousers
3,1%
Other Women's
Wear 16%
Trousers 15,1%
Dresses
12,5%
Trousers
17,3%
Costumes
15,40%
Sweaters/
Cardigans
15,7%
Dresses
18,8%
Sweaters/
Cardigans 12,4%
Costumes
16,1%
2009
Source/ Copyright: EFTEC, average annual growth over three years since 2009: 12,3 %
2012
8
3.3. Shares of main Product Categories of Intimate Apparel against total EU-27 Intimate
Apparel Exports to Russia, Comparison between Year 2012p and Year 2009
343,5 Million
Homewear/
Bathrobes
for females
and males
7,2%
Day
Underwear
for males
6,7%
Other
Underwear
(Nightwear)
3,1%
Swimwear
for females
and males
9,7%
Brassieres,
Corsetry,
Shapewear
15,2%
Nightwear
fell from 6,7 % to
4,5 %
Swimwear for
females and males
increased from
9,7 % to 9,8 %
Day
Underwear
for females
15,3%
Tights 42,8%
Brassieres,
Corsetry &
Shapewear
increased from
15,2 % to 22,4 %
2009
Source/Copyright: EFTEC, average annual growth over three years since 2009: 7,3 %
Day Underwear
for females
increased from
15,3 % to
26 %
2012
9
4.
2012
Period/Income Class in
Rubles
Total Working Population
1st Semester
9 months
Year 2011
1st Quarter
1st Semester
100 mn.
100 mn.
100 mn.
100 mn.
100 mn.
up to 3500.0
3,1
3,1
2,8
2,9
2,7
3.500,1-5.000,0
5,2
5,0
4,6
5,0
4,5
5.000,1-7.000,0
9,1
8,9
8,1
8,9
8,2
7.000,1-10.000,0
14,8
14,4
13,5
14,6
13,7
10.000,1-15.000,0
21,0
20,5
19,8
21,0
20,2
15.000,1-25.000,0
24,5
24,5
24,8
24,8
25,0
25.000,1-35.000,0
11,0
11,3
12,1
11,2
12,0
Over 35.000,0
11,3
12,3
14,3
11,6
13,7
10
5. EFTEC-Estimate on the Development Tendencies of the main six clothing Retail Channels in Russia,
Projection 2013
Projection on Categorization of Retail Channels, Price Level, Market Share, numbers of operating P.O.S.
and Development Tendency at Year-End 2012, based on a textile Clothing Retail Market Value of
35.000 Million
Category
Price
Level
Market Share
P.O.S. Numbers
Estimate
Tendency
Low
20 %
> 3.500
Lower
medium
19 %
> 2.000
LowerMediumToMedium
24 %
> 5.000
(thereof 1.000
foreign)
Medium
- to Upper medium
15 %
> 600
premium
- to luxury
8%
Upper medium
12 %
> 3.000
Distance Retail, Mail Order Catalogues and B2C online retail (Otto
Group, KupiVIP, lamoda.ru, wildberries)
medium
2%
> 15
11
2012
198
110
114
30
55
46
81
70
116
120
48
54
123
161
148
103
186
216
173
142
173
34
53
71
26
82
123
174
180
182
260
239
302
298
330
80
120
125
179
180
222
219
353
388
287
250
300
380
62
2010
462
2007
420
479
494
525
536
560
12
153
2012
114
2010
0
2
2
9
0
2
11
13
13
12
18
0
26
30
24
13
17
23
37
37
39
47
29
47
26
15
30
50
53
72
64
58
31
39
52
43
51
63
67
83
100
114
122
138
2007
13
6.
Projection of the Market Pyramid of textile Clothing & Accessories in Russia, 2012
(Total: 35.000 mn.)
Retail Market Value per Segment, Market Share, Average Retail Price Points, Category of Retail Channels,
Main Supplier Countries
Luxury Luxury monobrand stores
RUB 14.000 and multibrand boutiques
Luxury monobrand stores
Premium
and multibrand boutiques
RUB. 7.000
5.250 mn. = 14 %
RUB 6.900
7.000 mn. = 20 %
Upper Medium
RUB 3.000
10.500 mn. = 30 %
8.750 mn = 25 %
3.500 mn.= 10 %
RUB 400
Italy, France
Germany,
Switzerland
RUB 2.900
Italy,
Italy, Germany
France,
UK, Finland,
Austria
Russia/China, Turkey
Belarus, Ukraine,
Eastern EU
China, Turkey
Russia, Central
Asia
RUB 200
Source/Copyright : EFTEC
14
7. Persistant ERP, CRM & HRM Deficits in Russian independent multi-brand Retail:
lack of know-how
According to a survey conducted in January 2013 by ITMM GmbH among leading German
clothing suppliers the following deficits are currently under debate:
Unsufficient systematic monitoring of sell-off results and automatic information
to Suppliers/Agents, at least monthly
Planning of seasonal pre-order budgets per brand carried in brand-portfolio
Fast replenishment to increase turn-over velocity per square meter
Correct full-cost calculation of selling-prices to control effective margins
over the four discount phases
Application of recommended retail-selling prices proposed by suppliers
Brand-oriented visual merchandising (less is more)
Window decoration as trend promotion
Capacitation of sales personnel (materials, visual quality criteria, fashion trend content,
styling, wearing comfort). This is necessary to explain price-awareness of a garment.
60 percent of respondents said, that awareness on curing such deficits is either unsufficiently
developed or implementation seems difficult due to various mental or financial barriers
15
8.1. Growth Prospects in the Russian Regions through Shopping Mall Development
According to a recent survey of ITMM GmbH, evaluation of Sell-Off Results* over the Apparel Retail
Seasons S/S in the main 9 federal Districts proves a harmonization trend of retail climate, comparison
in between July 2011, 2012 and 2013.
Moscow City
Moscow Region
Northwest-Region
Central Russia
Volga
South-Russia
Ural
West-Siberia
Far North/East
July 2011
July 2012
July 2013
Tendency
2,5
2,4
2,6
3,0
3,2
3,3
3,1
3,1
3,3
2,3
1,9
2,4
2,8
2,8
2,6
2,4
2,1
3,1
2,1
2,9
3,0
3,0
2,9
2,5
2,7
2,6
2,8
Reason for the balancing of apparel retail climate is the ongoing investments in Shopping and
Entertainment Centers in provincial capitals and large cities of in between 500.000 and 750.000
inhabitants. The new trend is encompassing even smaller towns of a population of more than 100.000.
Cities and Towns belonging to Moscow Region and Central Russia are the most favoured hot spots for new
shopping center allocations.
indicated by German school note-scores from 1,0 (very good) down to 6,0 (very bad)
16
Moscow and Saint-Petersburg - currently the prime focus of retail activity and are highly
saturated and competitive.
Another 11 secondary cities with population of 1 -1.5 million have been the first point of
entry for retailers expanding beyond Moscow and St Petersburg.
17
9.
Market entry in Russia has become more difficult over the past three years due to
Mandatory registration of economically active companies and legal entities at the Register
of the Attorney General of Russia until December 31, 2009
Foundation of the Eurasian Customs Union (EAC) between Russia, Belarus and Kazakhstan in 2010
WTO Access of Russia after DUMA-ratification in August 2012.
Consolidation of Consumer Safety Rules and Regulations in one unified Technical Regulation
replacing the former GOST-R Certification by the EAC Conformity Declaration and Hygiene
Certification, Baby- and Childrenswear Safety Certification and Product Labeling, entering in force for
Clothing-Products on July 1, 2014
9.
The new legislative environment together with strong rising competition in the Russian apparel market
forces every foreign supplier to think twice about their past, present and future contractual relationship
with their customers in Russia, Belarus and Kazakhstan. For instance, orders, written on order-forms of the
supplier brand are not legally binding purchasing contracts, according to Russian legislation.
Dominant market players like TRIUMPH INTERNATIONAL, STOCKMANN, HENNES & MAURITZ,
CALZEDONIA/INTIMISSIMI all INDITEX brands such as online-providers like OTTO GROUP, KupiVIP,
lamoda.ru and others operate their own OOOs, purchasing from their sources in Rubles and selling to their
customers or points of sale in Rubles, all-complying with the rules & regulations applied by the Eurasian
Customs Union
To challenge the competitive advantage of the big players, foreign individual medium-to-smaller apparel
brands should get aware about the following alternatives:
Either to convince their agents/distributors to found a legal OOO entity and to act as contractual partner reponsible for
prior conformity declaration/ certification, compliance-oriented shipping, insurance, electronically pre-registered
customs clearing and import tax payments, furnishing individual retailers on the basis of pre-payments and full balance
payments prior to delivery in Rubles and to convert Rubles in ot US $ for bank transfer to the supplier.
Or to take initiative to establish their own OOO in Russia, or to contract to an accredited chartered accountant/law firm
with the objective to host foundation and day-to-day administrative work including accounting of an own OOO.
Or to co-operate with a technical importer providing a legally accredited OOO status, acting as a mediator of all
transactions necessary to supply apparel to the final retailer for payment in Rubles. In addition to authorize technical
importer to apply to the Competent Authority to obtain EAC Conformity Declarations and Hygiene Certificates, if
applicable, and to take care of the necessary sampling procedure accompanying the application procedure.
19
The output index for Russias key economic activities performed rather badly during the first four months.
Growth over the first quarter decreased by 0,6 percent. In April the indicator improved at 1,9 percent increase.
Reason for the weak economic development is zero output growth in agriculture over the first-quarter. In April
output increased at 2,3 percent. Moreover industrial output, which rose at 0,6 percent during the first three
months, picked up at a low 1,9 percent in April. Another important indicator, fixed capital investment,
registered a minimal rise over the first quarter at 0,1 percent and depreciated in April by 0,7 percent. Russias
consumer price index, indicator for inflation, reached a 7,1 % high at the end of the first quarter and continued
to rise at 7,2 percent in April and at 7,4 percent in May against the same periods of last year. Inflation obviously
drives Russians to consume on the basis of increases of real disposable money income, which rose at 5,3
percent over the first quarter and at 7,3 percent in April 2013.
Retail Trade Turnover appreciated at 3,9 percent over the first three months of this year and it progressed at
4,1 % in April. The rate of unemployment continued to fall from 6 percent of population at working age in
January to 5,6 percent in April.
The trade balance of Russia reached a surplus of US $ 49,8 billion at the end of the first three months. In April
trade balance development signaled a declining trend at a registered monthly surplus of US $ 14,2 billion. The
nominal exchange rate of US $ against Ruble reached its lowest level in February 2012 at RUR 28,95 for one US
$, its peak in June 2012 and ended up at RUR 30,37 in December of 2012. This rate almost matches the
exchange rate valid in January 2012 figuring at RUR 30,36 against US $. The nominal exchange rate of against
Ruble departed from RUR 39,97 in January 2012, depreciated to its lowest level in February 2012 at RUR 38,91
and reached its peak in June 2012 at RUR 41,32. In December 2012 the -exchange rate accounted for RUR
40,23. Given such results, conclusion is that the Russian Ruble remained extremely stable in between the
beginning and the end of 2012. All rumors about a strong depreciation of the Ruble of up to 15 percent, which
arose in May 2012 did not come true. This encourages more and more foreign fashion suppliers to sell their
products to their Russian customers in Rubles. The outlook on the Russian economy in 2013 is reluctantly
positive with an expected GDP-Growth of 3,5 percent, at real terms, which was revised downwards from 4
percent (World Bank).
20